Alice Forwood

Could digital currencies put banks out of business?

Alice Forwood

Commercial banks currently create most global money through fractional reserve lending, yet their role is diminishing as intangible assets hinder corporate financing and tech giants like Ant Group bypass traditional rails with massive digital ecosystems. In response, central banks are rapidly developing Central Bank Digital Currencies, with 80% considering issuance, to reclaim monetary control and maintain a direct consumer link against these non-bank competitors. While this shift toward a potential world without traditional banks offers financial inclusion benefits, experts warn it carries severe risks including systemic cyber vulnerabilities and expanded state surveillance over transactions.